TITAN MACHINERY INC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report, and the audited consolidated financial statements and related notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year endedJanuary 31, 2022 .
Overview
We own and operate a network of full service agricultural and construction equipment stores inthe United States andEurope . Based upon information provided to us by CNH Industrial N.V. or itsU.S. subsidiaryCNH Industrial America, LLC , we are the largest retail dealer of Case IH Agriculture equipment in the world, one of the largest retail dealers ofCase Construction equipment inNorth America and one of the largest retail dealers ofNew Holland Agriculture and New Holland Construction equipment inthe United States . We operate our business through three reportable segments: Agriculture, Construction and International. Within each segment, we have four principal sources of revenue: new and used equipment sales, parts sales, service, and equipment rental and other activities. Demand for agricultural equipment and, to a lesser extent, parts and service support, is impacted by agricultural commodity prices and net farm income. Based onFebruary 2022 U.S. Department of Agriculture publications, the estimate of net farm income for calendar year 2022 indicated an approximate 4.5% decrease as compared to calendar year 2021, and an approximate 25.1% increase in net farm income for calendar year 2021 as compared to calendar year 2020. For the first quarter of fiscal 2023, our net income was$17.5 million , or$0.78 per diluted share, compared to a fiscal 2022 first quarter net income of$10.5 million , or$0.47 per diluted share. Our adjusted diluted earnings per share was$0.79 for the first quarter of fiscal 2023, compared to$0.46 for the first quarter of fiscal 2022. See the Non-GAAP Financial Measures section below for a reconciliation of adjusted diluted earnings per share to diluted earnings per share, the most comparable GAAP financial measure. Significant factors impacting the quarterly comparisons were: •Revenue in the first quarter of fiscal 2023 increased by 23.7% compared to the first quarter of fiscal 2022. Total company same store sales increased 22.1% compared to the prior year first quarter. Same store sales increased in each of our three reporting segments. •Gross profit in the first quarter of fiscal 2023 increased 25.0% compared to the first quarter of fiscal 2022. The increase in gross profit was primarily the result of strong equipment sales and equipment gross profit margins increasing to 12.9% in the first quarter of fiscal 2023 from 11.7% in the first quarter of fiscal 2022. •Floorplan and other interest expense decreased a combined 4.7% in the first quarter of fiscal 2023, as compared to the first quarter last year, due to lower borrowings. Russian-Ukrainian Conflict Since the onset of the active conflict inFebruary 2022 , most ofTitan Machinery Ukraine's customers have been able to continue their work, although at a reduced capacity and schedule. The Company's websites and phone systems have continued to function but could be negatively impacted in the future. Some ofTitan Machinery Ukraine's back office employees have been able to relocate outside ofUkraine and continue to work, while the customer support and sales teams have remained inUkraine . The conflict could have a significant adverse effect upon the Company. As ofApril 30, 2022 , the Company had total assets of$35.0 million inUkraine . The physical assets (e.g. inventory and fixed assets) are almost exclusively located in central and western areas of the country. Total assets inUkraine as ofJanuary 31, 2022 , was$32.7 million . The situation is highly complex and continues to evolve. If the Company cannot provide efficient and uninterrupted services, this could have an adverse effect on the Company's operations and business inUkraine . In addition, the Company's ability to maintain adequate liquidity for our operations inUkraine is dependent on a number of factors, includingTitan Machinery Ukraine's revenue and earnings, which could be significantly impacted by the conflict inUkraine . Further, any additional military movement back into central and westernUkraine or any major threat to civilians or international banking disruption could materially impact the operations and liquidity of Titan Machinery Ukraine and the Company. 20
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Impact of the COVID-19 Pandemic on the Company
We continue to monitor the progression of COVID-19 and its impact on our business. As this pandemic continues, we are following the directives and advice of government leaders and medical professionals and continue to attempt to mitigate its impact on our employees, customers, vendors, and other business partners, and communities in which we live and work. While there was no material adverse impacts on the Company's results of operations for the three months endedApril 30, 2022 or 2021, uncertainty remains regarding the magnitude and duration of the pandemic and the resulting potential future financial effects. Increased infection rates and any future responses to mitigate the spread of the virus, including any potential vaccination mandates that would apply to our employees, could impact our business and our financial results of future periods.
Acquisitions
Fiscal 2023
OnApril 1, 2022 , the Company acquired certain assets ofMark's Machinery, Inc. The acquired business consisted of two agricultural equipment stores inWagner andYankton, South Dakota . These locations are included in our Agriculture segment. In its most recent fiscal year,Mark's Machinery, Inc. generated revenue of approximately$34.0 million . The total cash consideration paid for the acquired business was$7.7 million .
Fiscal 2022
OnDecember 1, 2021 , the Company acquired certain assets ofJaycox Implement, Inc. The acquired business consisted of three agricultural equipment stores inWorthington andLuverne, Minnesota andLake Park, Iowa . These locations are included in our Agriculture segment. In its most recent fiscal year,Jaycox Implement, Inc. generated revenue of approximately$91 million . The total cash consideration paid for the acquired business was$33.6 million .
ERP Transition
The Company is in the process of converting to a new Enterprise Resource
Planning ("ERP") application. The new ERP application is expected to provide
data-driven and mobile-enabled sales and support tools to improve employee
efficiency and deliver an enhanced customer experience. The Company integrated
one pilot store on the new ERP system in the second quarter of fiscal 2021 and
also integrated the five stores acquired through the Jaycox Implement and Mark's
Machinery acquistions in December 2021 and April 2022 , respectively. We expect
to begin our phased roll-out to the remaining domestic locations, beginning in
the second half of fiscal 2023.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are included in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year endedJanuary 31, 2022 . There have been no changes in our critical accounting policies and estimates sinceJanuary 31, 2022 .
Results of Operations
The results presented below include the operating results of any acquisition
made during these periods, from the date of acquisition, as well as the
operating results of any stores closed or divested during these periods, up to
the date of the store closure. The period-to-period comparisons included below
are not necessarily indicative of future results. Segment information is
provided later in the discussion and analysis of our results of operations.
Same-store sales for any period represent sales by stores that were part of
the Company for the entire comparable period in the current and preceding fiscal
years. We do not distinguish between relocated or recently expanded stores in
this same-store analysis. Closed stores are excluded from the same-store
analysis. Stores that do not meet the criteria for same-store classification are
described as excluded stores throughout this Results of Operations section.
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Comparative financial data for each of our four sources of revenue are expressed
below.
Three Months Ended April 30,
2022 2021
(dollars in thousands)
Equipment
Revenue $ 356,366 $ 275,980
Cost of revenue 310,234 243,676
Gross profit $ 46,132 $ 32,304
Gross profit margin 12.9 % 11.7 %
Parts
Revenue $ 68,562 $ 62,626
Cost of revenue 47,310 44,440
Gross profit $ 21,252 $ 18,186
Gross profit margin 31.0 % 29.0 %
Service
Revenue $ 29,523 $ 27,702
Cost of revenue 10,760 9,294
Gross profit $ 18,763 $ 18,408
Gross profit margin 63.6 % 66.5 %
Rental and other
Revenue $ 6,556 $ 6,398
Cost of revenue 4,009 4,318
Gross profit $ 2,547 $ 2,080
Gross profit margin 38.9 % 32.5 %
The following table sets forth our statements of operations data expressed as a percentage of total revenue for the periods indicated:
Three Months Ended April 30,
2022 2021
Revenue
Equipment 77.3 % 74.1 %
Parts 14.9 % 16.8 %
Service 6.4 % 7.4 %
Rental and other 1.4 % 1.7 %
Total Revenue 100.0 % 100.0 %
Total Cost of Revenue 80.8 % 81.0 %
Gross Profit Margin 19.2 % 19.0 %
Operating Expenses 13.9 % 15.1 %
Income from Operations 5.3 % 3.9 %
Other Income (Expense) (0.2) % (0.2) %
Income Before Income Taxes 5.1 % 3.7 %
Provision for Income Taxes 1.3 % 0.8 %
Net Income 3.8 % 2.8 %
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Three Months EndedApril 30, 2022 Compared to Three Months EndedApril 30, 2021 Consolidated Results Revenue Three Months Ended April 30, Increase/ Percent 2022 2021 (Decrease) Change (dollars in thousands) Equipment$ 356,366 $ 275,980 $ 80,386 29.1 % Parts 68,562 62,626 5,936 9.5 % Service 29,523 27,702 1,821 6.6 % Rental and other 6,556 6,398 158 2.5 % Total Revenue$ 461,007 $ 372,706 $ 88,301 23.7 % Total revenue for the first quarter of fiscal 2023 was 23.7% or$88.3 million higher than the first quarter of fiscal 2022 driven primarily by an increase in Company-wide same-store sales of 22.1% and our acquistions ofJaycox Implement andMark's Machinery , completed inDecember 2021 andApril 2022 , respectively. The same-store sales increase was primarily driven by favorable commodity prices, higher net farm income and increased construction activity in our footprint. Three Months Ended April 30, Increase/ Percent 2022 2021 (Decrease) Change (dollars in thousands) Gross Profit Equipment$ 46,132 $ 32,304 $ 13,828 42.8 % Parts 21,252 18,186 3,066 16.9 % Service 18,763 18,408 355 1.9 % Rental and other 2,547 2,080 467 22.5 % Total Gross Profit$ 88,694 $ 70,978 $ 17,716 25.0 % Gross Profit Margin Equipment 12.9 % 11.7 % 1.2 % 10.3 % Parts 31.0 % 29.0 % 2.0 % 6.9 % Service 63.6 % 66.5 % (2.9) % (4.4) % Rental and other 38.8 % 32.5 % 6.3 % 19.4 % Total Gross Profit Margin 19.2 % 19.0 % 0.2 % 1.1 % Gross Profit Mix Equipment 52.0 % 45.5 % 6.5 % 14.3 % Parts 24.0 % 25.6 % (1.6) % (6.3) % Service 21.2 % 25.9 % (4.7) % (18.1) % Rental and other 2.8 % 3.0 % (0.2) % (6.7) % Total Gross Profit Mix 100.0 % 100.0 % Gross profit for the first quarter of fiscal 2023 increased 25.0% or$17.7 million , as compared to the same period last year. Gross profit margin also improved to 19.2% in the current quarter from 19.0% in the prior year quarter. The increase in gross profit margin was primarily due to stronger equipment margins, which were positively impacted by a healthy inventory and favorable end market conditions. The increase in equipment margins, was partially offset by the gross profit mix shift, to lower margin equipment sales relative to parts, service, and rental sales. Our Company-wide absorption rate - which is calculated by dividing our gross profit from sales of parts, service and rental fleet by our operating expenses, less commission expense on equipment sales, plus interest expense on floorplan payables and rental fleet debt - increased to 80.3% for the first quarter of fiscal 2023 compared to 76.0% during the same period last year as the increase in gross profit from parts, rental fleet, and service in the first quarter of fiscal 2023 combined with lower floorplan interest expenses more than offset the increase in operating expenses during the period. 23
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Operating Expenses
Three Months Ended April 30, Increase/ Percent
2022 2021 (Decrease) Change
(dollars in thousands)
Operating Expenses $ 64,152 $ 56,442 $ 7,710 13.7 %
Operating Expenses as a Percentage of Revenue 13.9 % 15.1 % (1.2) % (7.9) %
Our operating expenses in the first quarter of fiscal 2023 increased 13.7% as
compared to the first quarter of fiscal 2022. The increase in operating expenses
was primarily due to an increase in variable expenses associated with increased
sales. Operating expenses as a percentage of revenue decreased to 13.9% in the
first quarter of fiscal 2023 from 15.1% in the first quarter of fiscal 2022. The
decrease in operating expenses as a percentage of revenue was due to the
increase in total revenue in the first quarter of fiscal 2023, as compared to
the first quarter of fiscal 2022, which positively affected our ability to
leverage our fixed operating costs.
Other Income (Expense)
Three Months Ended April 30, Increase/ Percent
2022 2021 (Decrease) Change
(dollars in thousands)
Interest and other income $ 492 $ 665 $ (173) (26.0) %
Floorplan interest expense (254) (418) (164) (39.2) %
Other interest expense (1,196) (1,104) 92 8.3 %
Interest and other income decreased by $0.2 million in the first quarter of
fiscal 2023, as compared to the first quarter of fiscal 2022, due to
fluctuations in foreign currency exchange rates, primarily the Ukrainian
currency. The decrease in floorplan interest expense of 39.2% was due to lower
borrowings. The increase in other interest expense was primarily due to
increased fixed rate, long term debt from real estate purchases throughout
fiscal 2022.
Provision for Income Taxes
Three Months Ended April 30, Increase/ Percent
2022 2021 (Decrease) Change
(dollars in thousands)
Provision for Income Taxes $ 6,044 $ 3,132 $ 2,912 93.0 %
Our effective tax rate was 25.6% and 22.9% for the three months ended
April 30, 2022 and April 30, 2021 , respectively. The effective tax rate for each
of the three months ended April 30, 2022 and 2021 is subject to variation due to
factors such as the impact of certain discrete items, mainly the vesting of
share-based compensation, the mix of domestic and foreign income and recognition
of a valuation allowance on certain of our foreign deferred tax assets.
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Segment Results
Certain financial information for our Agriculture, Construction and
International business segments is presented below. "Shared Resources" in the
table below refers to the various unallocated income/(expense) items that we
have retained at the general corporate level. Revenue between segments is
immaterial.
Three Months Ended April 30, Increase/ Percent
2022 2021 (Decrease) Change
(dollars in thousands)
Revenue
Agriculture $ 318,548 $ 229,554 $ 88,994 38.8 %
Construction 66,964 68,608 (1,644) (2.4) %
International 75,495 74,544 951 1.3 %
Total $ 461,007 $ 372,706 $ 88,301 23.7 %
Income Before Income Taxes
Agriculture $ 16,449 $ 11,224 $ 5,225 46.6 %
Construction 3,210 138 3,072 n/m
International 4,325 2,808 1,517 54.0 %
Segment Income Before Income Taxes 23,984 14,170 9,814 69.3 %
Shared Resources (400) (491) 91 18.5 %
Total $ 23,584 $ 13,679 $ 9,905 72.4 %
Agriculture
Agriculture segment revenue for the first quarter of fiscal 2023 increased
38.8% compared to the first quarter of fiscal 2022. The higher revenue was
driven primarily by an increase in same-store sales of 26.3% and our acquistions
of Jaycox Implement and Mark's Machinery , completed in December 2021 and April
2022 , respectively. The same-store sales increase was primarily driven by
favorable commodity prices and higher net farm income.
Agriculture segment income before income taxes was $16.4 million for the first
quarter of fiscal 2023 compared to $11.2 million for the first quarter of fiscal
2022. Higher equipment revenue along with increased gross profit margin on
equipment were the primary drivers of the increase in income before income
taxes.
Construction
Construction segment revenue for the first quarter of fiscal 2023 decreased 2.4% compared to the first quarter of fiscal 2022. However, after taking into account the divestiture of theBillings ,Great Falls , andMissoula, Montana , andGillette, Wyoming stores in the fourth quarter of fiscal 2022 and the first quarter of fiscal 2023 divestiture of our consumer products store inNorth Dakota , same-store sales in our Construction segment increased 24.9% for the first quarter of fiscal 2023, as compared to the first quarter of fiscal 2022. Higher same store sales were driven by increased construction activity throughout our footprint. Our Construction segment income before taxes was$3.2 million for the first quarter of fiscal 2023 compared to$0.1 million in the first quarter of fiscal 2022. The improvement in segment results was primarily due to an increase in same store sales, as described above, the sale of our consumer products store, in the first quarter of fiscal 2023, resulting in a gain of$1.4 million and increased equipment gross profit margin. An increase in rental fleet utilization, led to an increase in rental gross profit margin, also contributed to the improvement in segment results. The dollar utilization - which is calculated by dividing the rental revenue earned on our rental fleet by the average gross carrying value of our rental fleet (comprised of original equipment costs plus additional capitalized costs) for that period - of our rental fleet increased from 19.2% in the first quarter of fiscal 2022 to 24.5% in the first quarter of fiscal 2023.
International
International segment revenue, for the first quarter of fiscal 2023 increased 1.3% compared to the first quarter of fiscal 2022. Higher segment revenue was driven by many of the same macroeconomic factors as the Agriculture segment, which has improved customer sentiment and has had a positive impact on equipment sales. The increase in revenue was partially offset by lower revenues in our Ukrainian subsidiary, which was impacted by theRussia -Ukraine conflict in the first quarter of fiscal 25 -------------------------------------------------------------------------------- Table of Contents 2023. Same-store sales in our International segment increased 6.2% for the first quarter of fiscal 2023 as compared to the first quarter of fiscal 2022, primarily driven by an increase in equipment sales. Our International segment income before income taxes was$4.3 million for the first quarter of fiscal 2023 compared to segment income before income taxes of$2.8 million for the same period last year. The increase in segment pre-tax income was primarily the result of increased equipment sales and equipment gross profit margin. This increase was partially offset by a$0.7 million estimated bad debt provision on our accounts receivables with customers ofTitan Machinery Ukraine . Shared Resources/Eliminations We incur centralized expenses/income at our general corporate level, which we refer to as "Shared Resources," and then allocate most of these net expenses to our segments. Since these allocations are set early in the year, unallocated balances may occur. Shared Resources loss before income taxes was$0.4 million for the first quarter of fiscal 2023 compared to a loss before income taxes of$0.5 million for the same period last year.
Non-GAAP Financial Measures
To supplement net income and diluted earnings per share ("Diluted EPS"), both
GAAP measures, we present adjusted net income and adjusted Diluted EPS, both
non-GAAP measures, which include adjustments for items such as foreign currency
remeasurement gains/losses in Ukraine . We believe that the presentation of
adjusted net income and adjusted Diluted EPS is relevant and useful to our
management and investors because it provides a measurement of earnings on
activities that we consider to occur in the ordinary course of our business.
Adjusted net income and adjusted Diluted EPS should be evaluated in addition to,
and not considered a substitute for, or superior to, the most comparable GAAP
measure. In addition, other companies may calculate these non-GAAP measures in a
different manner, which may hinder comparability of our adjusted results with
those of other companies.
The following tables reconcile (i) net income, a GAAP measure, to adjusted net income and (ii) Diluted EPS, a GAAP measure, to adjusted Diluted EPS:
Three Months Ended
2022 2021
(dollars in thousands, except per
share data)
Adjusted Net Income
Net Income $ 17,540 $ 10,547
Adjustments
Ukraine remeasurement (gain) / loss (1) 294 (129)
Total Pre-Tax Adjustments 294 (129)
Adjusted Net Income $ 17,834 $ 10,418
Adjusted Diluted EPS
Diluted EPS $ 0.78 $ 0.47
Adjustments (2)
Ukraine remeasurement (gain) / loss (1) 0.01 (0.01)
Total Pre-Tax Adjustments 0.01 (0.01)
Adjusted Diluted EPS $ 0.79 $ 0.46
(1) Due to the income tax valuation allowance on the Ukrainian subsidiary, there are no tax
adjustments of the Ukraine remeasurement (gain)/loss for the quarters ending April 30, 2022 and 2021.
(2) Adjustments are net of amounts allocated to participating securities where applicable.
Liquidity and Capital Resources
Sources of Liquidity
Our primary sources of liquidity are cash reserves, cash generated from
operations, and borrowings under our floorplan and other credit facilities. We
expect these sources of liquidity to be sufficient to fund our working capital
requirements, acquisitions, capital expenditures and other investments in our
business, service our debt, pay our tax and lease obligations and other
commitments and contingencies, and meet any seasonal operating requirements for
the foreseeable future,
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provided that our borrowing capacity under our credit agreements is dependent on compliance with various covenants as further described in the "Risk Factors" section of our Annual Report on Form 10-K.
Equipment Inventory and Floorplan Payable Credit Facilities
As ofApril 30, 2022 , the Company had floorplan payable lines of credit for equipment purchases totaling$751.0 million , which is primarily comprised of a$450.0 million credit facility with CNH Industrial, a$185.0 million floorplan payable line under the Bank Syndicate Agreement, and a$50.0 million credit facility withDLL Finance . Our equipment inventory turnover increased from 2.3 times for the rolling 12 month period endedApril 30, 2021 to 3.5 times for the rolling 12 month period endedApril 30, 2022 . The increase in equipment turnover was attributable to an increase in equipment sales and a decrease in average equipment inventory over the rolling 12 month period endedApril 30, 2022 as compared to the same period endedApril 30, 2021 . Our equity in equipment inventory, which reflects the portion of our equipment inventory balance that is not financed by floorplan payables, decreased to 51.2% as ofApril 30, 2022 from 58.2% as ofJanuary 31, 2022 . The decrease was due to more inventory being financed with non-interest bearing floorplan lines of credit.
Adequacy of Capital Resources
Our primary uses of cash have been to fund our operating activities, including the purchase of inventories and providing for other working capital needs, meeting our debt service requirements, making payments due under our various leasing arrangements, and funding capital expenditures, including rental fleet assets. Based on our current operational performance, we believe our cash flow from operations, available cash and available borrowing capacity under our existing credit facilities will adequately provide for our liquidity needs for, at a minimum, the next 12 months. As ofApril 30, 2022 , we were in compliance with the financial covenants under our CNH Industrial andDLL Finance credit agreements and we were not subject to the fixed charge coverage ratio covenant under the Bank Syndicate Agreement as our adjusted excess availability plus eligible cash collateral (as defined therein) was not less than 15% of the lesser of (i) aggregate borrowing base and (ii) maximum credit amount as ofApril 30, 2022 . While not expected to occur, if anticipated operating results were to create the likelihood of a future covenant violation, we would expect to work with our lenders on an appropriate modification or amendment to our financing arrangements.
Cash Flow
Cash Flow Provided by Operating Activities
Net cash provided by operating activities was$5.3 million for the first three months of fiscal 2023, compared to net cash provided by operating activities of$27.0 million for the first three months of fiscal 2022. The change in net cash provided by operating activities is primarily the result of an increase in inventories partially offset by an increase in non-interest bearing floorplan lines of credit from manufacturers and higher net income for the first three months of fiscal 2023.
Cash Flow Used for Investing Activities
Net cash used for investing activities was$11.9 million for the first three months of fiscal 2023, compared to$9.0 million for the first three months of fiscal 2022. The increase in cash used for investing activities was primarily the result of the business acquisition ofMark's Machinery in the first three months of fiscal 2023.
Cash Flow Provided by (Used for) Financing Activities
Net cash provided by financing activities was$8.0 million for the first three months of fiscal 2023 compared to cash used for financing activities of$6.8 million for the first three months of fiscal 2022. The increase in cash provided by financing activities was primarily the result of proceeds from the financing of real estate, owned by the Company, and increased non-manufactured floorplan payables in the first three months of fiscal 2023 compared to the same period last year.
Information Concerning Off-Balance Sheet Arrangements
As ofApril 30, 2022 , we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Therefore, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships. 27
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FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Forward-looking statements are contained in this Quarterly Report on Form 10-Q, including in "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as in our Annual Report on Form 10-K for the year endedJanuary 31, 2022 , and in other materials filed or to be filed by the Company with theSecurities and Exchange Commission (and included in oral statements or other written statements made or to be made by the Company). Forward-looking statements are statements based on future expectations and specifically may include, among other things, statements relating to our expectations regarding the performance of our Ukrainian subsidiary within our International segment, the impact of farm income levels on customer demand for agricultural equipment and services, the impact of the COVID-19 pandemic on our business, the effectiveness of the new ERP system and the timing of the phased roll-out of the ERP system to the Company's domestic locations, the general market conditions of the agricultural and construction industries, equipment inventory levels, and our primary liquidity sources, and the adequacy of our capital resources. Any statements that are not based upon historical facts, including the outcome of events that have not yet occurred and our expectations for future performance, are forward-looking statements. The words "potential," "believe," "estimate," "expect," "intend," "may," "could," "will," "plan," "anticipate," and similar words and expressions are intended to identify forward-looking statements. These statements are based upon the current beliefs and expectations of our management. These forward-looking statements involve important risks and uncertainties that could significantly affect anticipated results or outcomes in the future and, accordingly, actual results or outcomes may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, the impact of theRussia -Ukraine conflict on our Ukrainian subsidiary, the duration, scope and impact of the COVID-19 pandemic on the Company's operations and business, including the disruption of supply chains and associated impacts on the Company's supply vendors, adverse market conditions in the agricultural and construction equipment industries, and those matters identified and discussed under the section titled "Risk Factors" in our Annual Report on Form 10-K. In addition to those matters, there may exist additional risks and uncertainties not currently known to us or that we currently deem to be immaterial that may materially adversely affect our business, financial condition or results of operations. 28
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